AMENDED AND RESTATED
                                OPTION AGREEMENT
                                       FOR
                         PURCHASE OF ORION 2 SPACECRAFT



         This Option Agreement ("Agreement"), dated January 29, 1997 ("Effective
Date") by and between  International  Private  Satellite  Partners,  L.P., d/b/a
Orion Atlantic,  L.P., a Delaware limited partnership with its principal offices
located at 2440 Research Boulevard, Rockville, Maryland 20850, U.S.A. ("ORION"),
and Matra Marconi Space UK Limited,  a company  organized and existing under the
laws of England and Wales with its registered office at The Grove,  Warren Lane,
Stanmore, Middlesex, HA7 4LY, England ("MMS"),


         WHEREAS, ORION desires to purchase from MMS, and MMS desires to sell to
ORION, an option to purchase a communications  satellite  ("ORION 2 Spacecraft")
designed,  developed,  built  and  delivered  in orbit on an Atlas  IIAS  launch
vehicle with the configuration,  schedule and technical performance requirements
set forth in the ORION 2  Purchase  Contract,  dated  the date  hereof,  as such
contract may be amended from time to time (the "ORION 2 Purchase Contract"); and


         WHEREAS,  the Parties desire to enforce certain provisions of the ORION
2 Purchase Contract as though such contract were enforceable on the date hereof;


         NOW,   THEREFORE,   in   consideration   of  the  mutual  promises  and
undertakings contained herein, the Parties, intending to be legally bound, agree
as follows:


1.       All  terms  used  herein  and  not  defined  shall  have  the  meanings
attributed to them in the ORION 2 Purchase Contract.


2.       Grant of Option. MMS hereby grants to ORION the option to purchase from
MMS the ORION 2 Spacecraft  constructed  and  delivered in  accordance  with the
terms and conditions of the ORION 2 Purchase Contract (the "Option").


3.       First Installment Payment Date; Option Period. For the purposes of this
Agreement, the "First Installment Payment Date" shall be the date upon which MMS
receives  Option  Installment  Payment 1 and the  "Option  Period"  shall be the
period  commencing  on the First  Installment  Payment  Date and expiring on the
earlier of (a) the date upon which ORION exercises the Option in accordance with
Section  5 below  and (b) the last day of the 16th  month  following  the  First
Installment  Payment Date,  but in no event later than June 30, 1998. At ORION's
request,  MMS shall extend the Option  Period  through July 31, 1998,  if, on or
before June 30, 1998,  ORION pays to (a) MMS an extension  fee of $2 million and
(b) the Launch  Vehicle  Agency an  additional  $700,000 in  satisfaction  of an
increase in the Launch Vehicle price.



<PAGE>


4.       Consideration for Option.
         -------------------------


         4.1 In consideration for MMS' grant of the Option, ORION has paid US $1
million  to the Launch  Vehicle  Agency for a launch  reservation  covering  the
Launch Period and shall pay an additional  US $48.4 million in  installments  as
specified  in the table  below on or before  the dates  specified  in such table
(each such payment being referred to herein as an "Option Installment Payment"):
<TABLE>
<CAPTION>

                                                                Option               Option
Option                                      Total Option        Installment          Installment
Installment                                 Installment         Payment Amount       Payment Amount
Payment #           Payment Date            Payment Amount      (Spacecraft)         (Launch Vehicle)
---------           ------------            --------------      ------------         ----------------

<C>                 <C>                     <C>
1                   Feb. 28, 1997*          US$ 2.0 Million

2                   March 31, 1997          US$ 22.0 Million

3                   June 15, 1997

4                   July 31, 1997

5                   Dec. 31, 1997
-----------------------------------------------------------------------------------------------------
Total                                       US$ 48.4 Million
</TABLE>


-----------------------------------

*Or on such earlier date as ORION's planned  financings are closed and funds are
disbursed into ORION's account.


         The sum of the Option  Installment  Payments and the US $1 million paid
to the Launch  Vehicle  Agency prior to the date hereof is referred to herein as
the "Option Price."


         4.2 MMS shall provide ORION ten (10) days written notice of each Option
Installment Payment due hereunder after Option Installment Payment 2.


         4.3 No  portion  of the  Option  Price  shall be  refundable  under any
circumstances, including the bankruptcy or insolvency of ORION.


         4.4 If ORION's planned financings are not closed and funds disbursed by
March 31, 1997,  ORION may extend Option  Installment  Payment 2 until April 30,
1997     by     making     a     partial     payment     of     $2.5     million
___________________________________________________________  on or before  March
31, 1997. Moreover,  to the extent net proceeds from ORION's planned public debt
financings are greater than $250,000,000 (exclusive of pre-funded amounts to pay
interest),  ORION shall  accelerate the payment of the Launch Vehicle portion of
Option  Installment  Payments 3 and 5 to the date upon which Option  Installment
Payment 2 is made.


                                       2

<PAGE>




5.       Exercise of Option; Effect of Exercise.


         5.1 Orion may  exercise the Option from the First  Installment  Payment
Date  through  the  last  day of the  Option  Period  by  paying  to (a) MMS the
cumulative  Milestone  Payments  payable  under  the ORION 2  Purchase  Contract
through the exercise date less the Option Installment Payments (Spacecraft) paid
pursuant to Section 4.1 above to such date and (b) the Launch Vehicle Agency the
cumulative Progress Payments payable under the ORION 2 Purchase Contract through
the exercise date less the Option  Installment  Payments  (Launch  Vehicle) paid
pursuant  to  Section  4.1 above to such  date (in the  aggregate,  the  "Option
Exercise Price"). If there is a dispute as to the cumulative  Milestone Payments
or Progress Payments payable through the exercise date, the provisions set forth
in Article 6.2 of the ORION 2 Purchase Contract shall apply.


         5.2 As of the date ORION  exercises  the  Option,  the ORION 2 Purchase
Contract  shall be deemed to be fully  effective  and to have been in full force
and effect from the First Installment Payment Date.


6.       Title to Work.  Notwithstanding  any  provision of the ORION 2 Purchase
Contract  incorporated by reference  herein,  MMS shall retain title to the Work
from the Effective Date until ORION exercises the Option.  Upon ORION's exercise
of the  Option in  accordance  with this  Agreement,  title to the Work shall be
governed by the ORION 2 Purchase Contract.


7.       MMS' Covenant.  MMS covenants to ORION and ORION  acknowledges that (a)
MMS will commence to perform the Work on the First Installment  Payment Date and
will continue to perform the Work until  termination  of this Agreement if ORION
pays each  Option  Installment  Payment  on or before  the date such  Payment is
required to be made and (b) to perform the Work  according  to the  schedule set
forth in the ORION 2 Purchase Contract,  MMS will be required to expend funds in
excess of the Option Price.


8.       Access to Work and  Progress  Reports.  During the Option  Period,  the
provisions of Exhibit 8 shall govern  ORION's  access to Work under Article 7 of
the ORION 2 Purchase  Contract  and MMS'  delivery  of  progress  reports  under
Article 40 of the ORION 2 Purchase Contract.


9.       Representations.

         (a) MMS  represents,  warrants and covenants  that (1) it has the power
and  authority  to grant the Option and to execute,  deliver,  and perform  this
Agreement and (2) its  performance  of this Agreement will not violate any other
agreement to which MMS is a party.

         (b)  ORION  represents  and  warrants  that  (1) it has the  power  and
authority  to execute,  deliver,  and perform  this  Option  Agreement,  (2) its
performance  of this  Agreement  will not violate any other  agreement  to which
ORION is a party,  (3) it is not entering into this  Agreement with an intent to
hinder,  delay,  or  defraud  any of its  creditors,  and (4) the  making of the


                                       3


                                       3
<PAGE>


payments  required to be made  hereunder will not, at the time such payments are
made, cause ORION to be insolvent.


10.      Payments. ORION shall make all Option Installment Payments (Spacecraft)
to MMS and all  Option  Installment  Payments  (Launch  Vehicle)  to the  Launch
Vehicle Agency by transferring  the amounts required to be paid .to the accounts
designated in Article 6.1.3 of the ORION 2 Purchase Contract. All payments to be
made pursuant hereto shall be made in U.S. Dollars.  MMS shall notify, and shall
direct the Launch Vehicle  Agency to notify,  ORION of any change in the account
information  contained  in  Article  6.1.3 at least ten days  before  any Option
Installment Payment is required to be made.


11.      Failure to  Exercise  Option or to Make  Payments - Sole and  Exclusive
Remedy.  Notwithstanding  any other provision of this Agreement or any provision
of the ORION 2 Purchase Contract incorporated by reference herein, if: (a) ORION
fails to  exercise  the Option in the manner  provided in this  Agreement  on or
before the date the Option Period expires;  or (b) ORION fails to pay any Option
Installment  Payment  hereof  (after  receipt of notice under Section 4.2) on or
before the dates specified in Section 4; then, at its option,  MMS may terminate
this Option  Agreement  immediately  upon written notice to ORION and retain all
money paid by ORION to MMS pursuant to this  Agreement  and the ownership of all
Work.  This is MMS' sole and  exclusive  remedy for ORION's  failure to make any
Option Installment Payment.


12.      Term and  Termination.  The term of this  Agreement  shall begin on the
Effective Date and continue  until the earliest to occur of the  following:  (a)
ORION  exercises the Option in the manner  provided in this  Agreement;  (b) the
last day of the Option Period expires;  (c) MMS terminates this Option Agreement
in  accordance  with  Section  11;  and (d) the date  upon  which  ORION and MMS
mutually agree to terminate this Agreement.  In addition, MMS may terminate this
Option  Agreement if, on March 31, 1997 (or April 30, 1997 if extended  pursuant
to Section  4.4  hereof),  Restated  Amendment  # 10 to the Second  Amended  and
Restated  Purchase  Contract,  between  MMS and ORION,  is not in full force and
effect and there is no default thereunder.  Within 30 days of the termination of
this Agreement for any reason other than ORION's  exercise of the Option,  ORION
shall return to MMS all copies of all Data and  Documentation  provided to ORION
in respect of the ORION 2 Spacecraft.


13.      Incorporation by Reference.  A copy of the ORION 2 Purchase Contract is
attached  hereto.  Each  Amendment  to the  ORION 2  Contract  shall,  upon  its
execution, be attached to this Agreement. The provisions of the ORION 2 Purchase
Contract  identified  on  Exhibits  8 and 13  hereto  shall be  incorporated  by
reference  herein  and made a part  hereof  and shall be  enforceable  as though
stated in full herein.


14.      Notices. Any notice or other communication  required or permitted to be
made or given by either Party pursuant to this Agreement  shall be  sufficiently
given if given in accordance with Article 34 of the ORION 2 Purchase Contract.

15.      General.



                                       4


                                       4
<PAGE>




         15.1  This  Agreement  (and any Exhibits  hereto) sets forth the entire
understanding  between  the  Parties  with  respect  to its  subject  matter and
supersedes  all prior and  contemporaneous  agreements and  understandings  with
respect thereto other than the ORION 2 Purchase Contract.

         15.2  This Agreement shall not constitute, give effect to, or otherwise
imply, a joint venture,  partnership,  agency or formal business organization of
any kind between the Parties.

         15.3  This Agreement may be amended only by a written instrument signed
by an authorized representative of each Party.

         15.4  ORION may not assign or  transfer  this  Agreement  except to any
party that (a)  demonstrates  to MMS'  reasonable  satisfaction  that it has the
financial  ability to pay the Option Exercise Price and (b) satisfies any export
license  requirements  applicable to MMS' performance of the Work. MMS shall not
assign,  delegate,  or in any manner  transfer this Agreement  without the prior
written  consent of ORION.  This Agreement  shall be binding upon the successors
and assigns of the Parties hereto.

         15.5  No Party  shall,  by any act,  delay,  indulgence,  omission,  or
otherwise  (except by a written  instrument  signed by the Parties  hereto),  be
deemed to have waived any right hereunder or to have acquiesced in any breach of
any of the terms and conditions  hereof and no failure by a Party to exercise or
delay in exercising any right,  power, or privilege hereunder shall operate as a
waiver thereof.  No single or partial exercise of any right, power, or privilege
hereunder shall preclude any other or further  exercise  thereof or the exercise
of any other right, power, or privilege. A Party's waiver of any right or remedy
hereunder  on any one  occasion  shall not be construed as a bar to any right or
remedy that such Party would otherwise have on any future occasion.

         15.6  The rights and remedies herein  provided are  cumulative,  may be
exercised  singly  or  concurrently,  and are not  exclusive  of any  rights  or
remedies  provided at law or in equity  (other than the remedy in Section 11 for
ORION's  failure to make  Option  Installment  Payments  at the times  specified
therein, which is an exclusive remedy).

         15.7  If any  provision  of  this  Agreement  is  declared  invalid  or
otherwise unenforceable, the enforceability of the remaining provisions shall be
unimpaired, and the Parties shall replace the invalid or unenforceable provision
with a valid and enforceable  provision that reflects the original intentions of
the  Parties as nearly as possible  in  accordance  with  applicable  law.  This
Agreement shall benefit the Parties hereto only.

         15.8  Provisions of this Agreement  which by their express terms impose
continuing   obligations   on  the  Parties  shall  survive  the  expiration  or
termination of this Agreement.

         15.9  This Agreement may be executed in a number of counterparts,  each
of which shall be deemed an original and all of which shall  constitute  one and
the same instrument.

         15.10 This  Agreement  shall be governed by and construed in accordance
with the substantive  laws of the State of Maryland,  exclusive of its choice of
law rules.

                                       5


<PAGE>


         IN WITNESS  WHEREOF,  the  Parties  have caused  this  Agreement  to be
executed by their duly authorized representatives, with an Effective Date as set
forth in the introductory paragraph of this Agreement.

INTERNATIONAL PRIVATE                          MATRA MARCONI SPACE
SATELLITE PARTNERS, L.P.                       UK LIMITED

By:  Orion Satellite Corporation,
     General Partner


By:   _____________________________            By:  ____________________________
         Name:                                         Name:  Armand Carlier
         Title:                                        Title: Director






                                       6